Wealth, how can we create it? Attorney and entrepreneur Pillara Henderson-Smith, featured in the Small Business Spotlight in July/August edition of Sistah’s Place magazine, wants to build generational wealth in the black community. To ensure this happens, here are four ways she recommends you can get started today.
Prepare a Will
Wills give directives for the wrapping-up of your affairs; the distribution of your remaining property; the appointment of an executor over your estate; and the appointment of a guardian for your minor or disabled child(ren). They allow you to decide who should receive your property; how much of the property they should receive; and documents who should care for your minor children in your absence.
Without a will, the state in which you reside makes these decisions on your behalf. The state’s plan may not align with your wishes.
Appoint a Guardian for Your Minor or Disabled Child(ren)
It is not uncommon in the Black community for grandmas and aunties to step in and help raise our children. However, assumptions should not be made that this will automatically happen.
As parents, it is important to name a trusted person to care for your child’s daily needs, as well as protect any assets he/she may inherit. You can appoint one guardian for all of your children or individual guardians for each child.
Prepare a Health Care Power of Attorney and a Financial Power of Attorney
With a power of attorney, you choose someone to give temporary or permanent authority, to act on your behalf as your agent to make health care or financial decisions as authorized within the document when you cannot speak for yourself because of a mental, emotional or physical incapacity. The agent basically steps into your shoes and makes decisions for you based on the directions that you have stated within the powers of attorney.
A financial power of attorney appoints someone to handle your finances and ensures that all necessary aspects of your property continue. This includes but is not limited to accessing funds in the bank, paying rent or mortgage, buying groceries, and completing financial transactions such as purchasing or selling real estate.
With a power of attorney for health care, you are able to communicate your health care wishes clearly. This allows you to have the quality and quantity of life you desire and clearly states what end of life decisions should be made at the time of death.
Purchase
life insurance
Life insurance provides coverage for funeral and burial expenses. Because there are several types of policies there are different strategies and ways that someone can use life insurance, for example some policies allow you to take a portion of the death benefits during life if you have been given a terminal diagnosis, some have a cash value and can be used as a borrowing or investment tool.
What is the minimum amount of coverage you recommend?
The minimum amount of coverage will vary per family. A good starting place may be 10x your current income. However, you will want to determine what your ultimate goals are for the use of the policy. For example:
- If you are married with minor children, do you want to replace your income for your minor children and surviving spouse’s care?
- If you have minor children, do you want to cover their future education expenses?
- Do you want to give more financial stability and possibly an increase in wealth to your survivors?
- Do you have debts and liabilities such as a mortgage, car note, or student loans which need to be paid off?
- If you own a business, will your surviving spouse or children need funds to continue the business or to wrap-up the business and pay off all outstanding debt?
These are such a few examples, therefore sitting down with a trusted insurance agent and discussing your current financial health, your need, and your goals is the best way to determine the best policy for you. If you want a peace of mind, financial security, and the possibility to create generational wealth, contact
